Arab States at the World Bank Want to Increase Their Voting Power, Thus Lasing the Way for PLO Recog

Behind the demand of the Arab states for the recognition of the Palestine Liberation Organization by the World Bank and the International Monetary Fund (IMF) is the much wider issue related to their desire to increase Arab voting power and a commensurate decrease in the strength of the industrialized democracies in the affairs of the World bank Group. The increase in Arab power would thus enable the oil producing states to ease the way for PLO recognition.

Banking authorities who specialize in these particular matters at the annual meeting of the two fiscal organizations that opened here today, explained to the Jewish Telegraphic Agency that the oil-producing countries want more authority than they have and that the PLO issue is merely a facet of their aim for greater strength.

Technically, the bid for the PLO to have observer status at the current meeting has been turned aside by the democracies led by the United States. But the issue is being discussed by the joint procedures committee chaired by pro-PLO Tanzanian Finance Minister Amir Jamal. There is at least a probability that the rules will be bent to satisfy the Arab states for additional strength.

MAIN ISSUE IS WEIGHTED VOTES

“The issue goes beyond the PLO,” said a specialist who asked not to be identified. “The main issue is the weighted votes allocated in 1944 at Bretton Woods when the bank and fund were armed. These weights have not been changed all these years, although the economic realities have changed. The changes ought to lead to more voting rights to those with new economic strength. The OPEC states have been asked to increase their contributions to the bank but they have never been granted rights equal to their contributions.”

When the specialist, familiar with the perceptions of the Arab oil producers was asked by the JTA whether the democracies would continue to hold authority, he explained that “the industrial world will keep their majority since it still has the economic weight but an adjustment is needed.”

He then noted that a group known as “G-24” consisting of 24 developing countries, including the OPEC nations, want to increase their share of the voting strength from their present 38 percent of the total weighted vote to 45 percent. “These nations are cohesive in their desire for greater power, ” he said. Besides the Arab states, the 24 include countries like Nigeria, Venezuela and Gabon.

The World Bank and IMF governing boards that had accepted the U.S. resolution which in effect barred the PLO from participation this year, are under harsh attack from the Arab states on legal grounds.

The Arabs, the JTA was informed, believe the boards had no authority to extend the deadline on the voting on the U.S. resolution from Sept. 9 to Sept. 19 because the democracies were unable to obtain a quorum by the earlier date. The Arabs, it was said, succeeded in having enough states boycott the vote to block a quorum and thus allow Tanzania as chairman to invite the PLO as an observer.

Jamal told the bank and fund at their opening session today that “the question of observer status for the PLO and the legal issues surrounding it are being dealt with in the joint procedures committee.” He said he “will say no more about it” until the committee “has reported on the matter.” This was interpreted as meaning that apart from giving, vent to their feelings in speeches, the PLO’s supporters will not press for a resolution before the committee’s action, expected late Thursday.

The committee consists of 21 members with apparently nine solidly on the PLO’s side and two others leaning toward it. It is possible the committee will pass the issue to a subcommittee as happened as year in Belgrade. At that time, a subcommittee of eight split even and the issue was forwarded to this year’s meeting. However, Jamal decided to invite the PLO and the U.S. introduced the proposal to block him.

REPRISAL BY CHAIRMAN

While successful to the extent of holding off the PLO’s entry, the democracies had to accept Jamal’s reprisal by which he “disinvite” the approximately 42 usual observers from the meeting. These include such institutions as the Bank for International Settlements, the Organization for Economic Cooperation and Development, the General Assembly for Tariff and Trade, the European Economic Community and OPEC itself. However, these bodies were reported to have been able to attend the session by having their representatives listed as “special guests.”

The power of the Arab states and their allies was indicated by the fact that Tanzania, whose input into the fund is only one-twentieth of one percent, was able to sway the giant industrial countries to accept Jamal’s decision spurning the worldwide groups. Only the United Nations could be officially represented as an observer, because under the bank’s charter the bank and the IMF are specialized agencies of the UN.